FDIC to drop $58.9 billion on Horizon Bank failure

Horizon Bank, of Bradenton, Florida, which has operated in Manatee County, in the Tampa Bay region since 1999, was shut down on Friday by the Florida Office of Financial Regulation.

In July Horizon engaged Cappello Capital Corp. of Santa Monica, California, to be its financial advisor in connection with a proposed recapitalization of Horizon Bank, which unfortunately for the bank did not eventuate.

On Friday the Federal Deposit Insurance Corporation (FDIC) was named as receiver. To protect the depositors, the FDIC says it has entered into a purchase and assumption agreement with Bank of the Ozarks, of Little Rock, Arkansas, to assume all of the deposits of Horizon Bank.

The four Horizon branches at 900 53rd Avenue, East Bradenton, 2102 59th Street, West Bradenton, 1525 E. Brandon Blvd, Brandon, and 501 8th Avenue West, Palmetto (pictured), will reopen on Monday as branches of Bank of the Ozarks. Depositors of Horizon Bank will automatically become depositors of Bank of the Ozarks, the FDIC said in a statement published late Friday. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage. Customers of Horizon Bank should continue to use their existing branch until they receive notice from Bank of the Ozarks that it has completed systems changes to allow other Bank of the Ozarks branches to process their accounts as well, the FDIC statement said.

During the weekend, depositors of Horizon can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of June 30, 2010, Horizon Bank, which made a first quarter profit this year of $143,000, had approximately $187.8 million in total assets and $164.6 million in total deposits. Bank of the Ozarks did not pay the FDIC a premium for the deposits of Horizon Bank.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $58.9 million. Compared to other alternatives, Bank of the Ozarks' acquisition was the least costly resolution for the FDIC's DIF. Horizon Bank is the 119th FDIC-insured institution to fail in the nation this year, and the twenty-third in Florida. The last FDIC-insured institution closed in the state was Community National Bank at Bartow, Bartow, on August 20, 2010.